Economic Growth with Equity: Challenges for Latin America

Despite notable growth spurts, sustained growth has been elusive in Latin America for the bulk of the last quarter century. In a region mired with social and economic inequalities, and an average per-capita GDP one-fifth that of the more developed countries, there are multiple challenges to bridging the development gap.

Achieving equitable growth is seen as the best route, although experts are still divided as to what constitutes a success story. As a result, alternative interpretations of existing development experiences are intertwined with suggestions for how to connect the often diverging paths of growth and equity in a new book edited by José Luis Machinea, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), and Ricardo Ffrench-Davis, Advisor to ECLAC's Executive Secretary.

Published this month by Palgrave Macmillan Ltd, Economic growth with equity: Challenges for Latin America, is the fruit of a seminar by the same title, held at ECLAC headquarters 1-2 September, 2005. Ten papers prepared for that event have been revised and edited for this publication. Besides the editors, the list of authors includes: François Bourguignon, vice-president of the World Bank, Dani Rodrik, professor at Harvard University, and José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs for the United Nations.

The book begins with an overview by José Luis Machinea, followed by a review of recent development experiences and their interpretations as successes or failures. The next set of articles examines the interrelation between growth and equity and how policy-makers can adopt pro-growth social policies. Finance is also analyzed, with a chapter on financial globalization, which explores how financial markets can go from being crisis-prone to development-friendly. The final chapters, on trade and growth, look at how the diversity and stability of exports affects growth, and tries to answer why Asia grows faster than Latin America.

The issues encompassed in this work have been at the core of ECLAC's research and policy work throughout its history, embodied in its contributions over the years to the study of the determinants of economic development. The Commission has recently emphasized the need to put public policies back at the center of the development agenda, and has insisted on the importance of an integrated approach to social and economic policy issues. The aim of these recommendations is to allow the countries of the region to achieve sustained growth with a more equitable distribution of the resulting benefits.